Académique Documents
Professionnel Documents
Culture Documents
TABLE 1
Types of Corruption in Education by Buyer and Seller
Buyers
Seller Rectors Students Suppliers
down, and the various agents (ministry officials, rectors, faculty, and staff)
no longer acted in concert. Decentralization and privatization did not reduce
bribe taking but may have significantly increased it. The increase was par-
ticularly rapid if international competition from private education providers
was restricted.4 The quality of education was likely to deteriorate during this
phase because individual rent-seeking behavior by agents increased.
Local private providers of educational goods and services entered the
market, and this sometimes included foreign providers. The new suppliers
provided education in the local language or a foreign language. The owners
were local, foreign selling a local product, or foreign selling a branded
product.5
Today, the causes and the mechanisms of education corruption are quite
varied. Bribes may be obtained in eight different ways (table 1). In the case
of procurement and accreditation, the buyer is the educational institution,
and the seller of the bribe is the government, usually the Ministry of Edu-
cation. In the case of obtaining illegal entrance to specialized programs,
having grades raised on the grounds of an illegal payment, or paying illegally
for normal educational services (housing, library use, and administrative
procedures),6 the buyer is the student, and the seller is either a faculty
member or the administration of the university. The agents vary but can be
broadly classified as teachers, rectors and other administrators, and the Min-
istry of Education.
4
Examples include Tajikistan and Uzbekistan. See Iveta Silova et al. (2007).
5
The hierarchy in price and prestige normally includes four categories of institutions: (i) local
institutions (public or private) that, for instance, supply a business degree in the local language; (ii)
local institutions that supply a business degree in an international language; (iii) international institutions
with unknown names that supply a business degree in an international language; and (iv) an inter-
national institution with a well-known brand name that supplies a business degree in an international
language.
6
Students are sometimes required to show their teacher that they bought the textbook authored
by the teacher (rather than using a borrowed book) from a store before they are allowed to take the
final examination. Postgraduate students may be asked for a bribe before a member of the dissertation
committee will agree to sign off on their doctoral thesis.
2 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
But how common is the perception of corruption? And how different is the
perception of corruption from the actual experience of corruption?
4 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
TABLE 2
University Student Opinions about Corruption (%)
TABLE 3
How Do You Feel about Cheating? (Percent Answering Yes)
feel badly about it (see table 3). Nevertheless, even in circumstances in which
cheating is the norm, between 11 and 14 percent of the students and faculty
resist the temptation and consider corrupt behavior to be unacceptable.
What should be done with those who are caught? Thirty-four percent of
the students in Bulgaria thought that they should be expelled; 36 percent
of students in Serbia approved of a severe penalty such as expulsion, legal
prosecution, jail, and public humiliation. However, 90 percent of the students
did not know the penalty for faculty who are caught accepting a bribe, and
8790 percent of them did not know the penalty for students who cheat
(Posliyski and Vatev n.d.).
In a study of students at local universities in the Kyrgyz Republic, the
majority of students in most of the universities described their institutions
as being bribable (see table 4). A private university managed by foreign
owners, in accordance with international standards of professional conduct,
might be expected to have significantly less corruption than in government
TABLE 4
University Students in the Kyrgyz Republic Who Describe Their University
as Bribable
universities.10 This is supported by the data in table 4, where only 5.1 percent
of the students at the American University of Central Asia report that their
university is bribable as opposed to between 50 and 70 percent in local
government universities (Ebert Fund, March 2, 2006).11
This latter finding is corroborated by evidence from Kazakhstan. Students
at a Turkish-owned university were asked if teachers were willing to take gifts
and other payments and if the course was professional.12 An average of 7
percent of students in 2001 reported that the faculty accepted gifts. However,
when the survey was repeated 4 years later the proportion declined to 3.3
percent. There was a significant decline in the percentage of students re-
porting gift taking or bribery among faculty after instructors knew that this
behavior would be reported. Like the American University of Central Asia,
the Kazak-Turkish University has a lower incidence of bribery than local state
institutions because of the application of external standards of professional
conduct to the behavior of faculty and administrators.
Which Disciplines Are More Likely to Accept Bribes?
Within higher-education institutions, there was wide variation in corrup-
tion across departments and fields. This is evident in the data from the Kazak-
Turkish University (see table 5). In 2001 gift taking was highest in chemistry,
world history, Kazakh literature, language, political science, and economics
10
A foreign university must adhere to two sources of rules and regulations: from the country in
which they are situated and in their home country.
11
In this context local implies locally as opposed to internationally accredited universities. It
does not imply a subnational geographical unit as in county or region.
12
The professional quality of the course and the instructor was defined in terms of the quality of
lectures and seminars, respect from students, and objectivity in evaluation of a students progress. The
average score of the four professional quality questions was the instructors rating on professional skill.
The faculty did not know in advance that the question on gift taking would be included on the student
evaluation form. In the 2004/5 survey of students the faculty knew that the question on gift taking
would be included; the gift taking question was changed so that bribery could be separately identified
from giving gifts without requiring a favor from the instructor. The revised question was Did the teacher
demand gifts or bribes from you?
6 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
TABLE 5
Bribery by Departments in the Kazak-Turkish University, 2001 and 2005
Design 0 9.0
Physics 1.0 5.6
Russian language 1.3 4.9
Imitative (fine) arts 1.7 8.4
Information systems 1.8 5.1
Organic and physical chemistry 2.1 16.8
World history 2.3 14.9
Linguistics 2.4 3.1
Study of Turkic 2.5 7.1
Clothing design 2.6 4.4
World literature 2.6 5.3
History of Kazakhstan 2.7 4.0
Kazakh literature 2.8 10.8
Mechanics 3.0 4.6
Physical culture 3.1 7.9
Kazakh language 3.1 9.2
Music and singing 3.4 5.3
General and nonorganic chemistry 3.7 10.1
High mathematics 3.8 6.9
Foreign language 3.8 5.7
Ecology 3.8 0
Political science 5.0 9.5
Biology 5.2 5.9
English language 5.9 3.9
Graphics 7.8 6.9
Economics and management 10.1 8.1
Law 12.8 5.4
Source.Shymkent Institute Sociology Survey, Shymkent, Kazakhstan, 2006.
and lowest in physics, Russian language, and fine arts. Bribery was reported
by 16.8 percent of the students in the organic and physical chemistry de-
partments and 8.1 percent in economics. Four years later, the incidence
declined in all departments except English language, economics, manage-
ment, graphics, and law. Reported bribery in economics increased from 8
to 10 percent and in law from 5.4 to 12.8 percent.
In general the disciplines most likely to be characterized by bribery seem
to be those in highest demandlaw, economics, finance, and criminology
where the competition to enter is greater, the fees and tuitions are larger,
and the stakes for graduating are higher.13 Senior officials interviewed in
Russia reported that the faculty salary was 50 percent of the wage paid in
the private sector for PhD-trained employees in the humanities and 30 per-
cent or lower of the private-sector wage for PhD-trained employees in eco-
13
Tuitions are often higher in vocational certification programs (such as for the customs service),
where the opportunities for bribes are greater. Bribery may also be involved when universities seek to
be accredited by the Ministry of Education to offer those particular programs.
nomics and law.14 The pattern of corruption in the Kazak data is consistent
with the evidence from other sources. The probability that an instructor
accepts a bribe increases as the difference in the market value of the instruc-
tors wage and the university wage widens. If bribery cannot be detected easily
or if sanctions are weak, the probability of bribe taking is even higher (Becker
and Stigler 1974; Rose-Ackerman 1975; Shleifer and Vishny 1993; van Rijck-
eghem and Weber 2001; Sosa 2004). The sanctions imposed for revealed
corruption are severe at foreign-operated universities such as the American
University of Central Asia or the Kazak-Turkish Institute and include expul-
sion of students and firing of faculty.15 However, in many other universities,
corruption is openly practiced, and faculty and students are rarely sanctioned
for corrupt behavior.16
A similar pattern across the disciplines is observed in Bulgaria and Serbia.
Figure 1 shows the percentage of students who bought a textbook as a con-
dition for passing an exam in Bulgaria. It is highest in medicine (58 percent)
and dentistry (54 percent), followed by chemistry (50 percent), law, history,
sociology/political science, economics, and engineering/electronics (4050
percent). In Serbia the largest sources of corruption also appear to be in
medicine, economics, and law (see table 6). Students in these Serbian uni-
versity departments were more likely to pay other students or faculty to take
an exam, to pay a bribe, or be forced to buy a personal textbook by a faculty
member, enroll illegally, or experience corruption among administrators than
within the university as a whole.
14
In the Kyrgyz Republic, e.g., the average faculty salary in universities in the capital city, Bishkek,
is about $50 a month. This information was obtained from conversations with faculty at several uni-
versities. In the poorest region of the countryNaryn oblastthe average take-home faculty salary is
$30 a month, which, according to one professor of economics, was enough to cover only 2 weeks of
living expenses in Naryn.
15
Here we refer to foreign, publicly operated universities. We might speculate that a similar pattern
might occur with foreign, privately operated universities, but we have no firsthand evidence on this as
yet.
16
In several universities, students reported to us that some professors selected a class representative
to collect bribes from other students in the class before exams were graded. This differs from a grading
fee known in other regions because the fees pocketed by the faculty member in this case are done so
illegally. All students in the class were aware that a bribe was expected. In other cases, parents sent
bribes to professors before their children took their oral exams. The difficulty of these exams depended
on the amount of the bribe paid by parents before the exam. The incidence of bribery was close to
100 percent if the course was a correspondence course.
8 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
Fig. 1.Was student required to buy professors textbook as a condition of passing an exam?
Responses by Bulgarian students in 2003. Source: Posliyski and Vatev (2003).
TABLE 6
Corruption by Faculty, Serbia, 2003
tivity18 type or purpose (Solmon and Wachtel 1975) and ones individual
course of study (Link 1973; Rumberger and Thomas 1993). While most
studies have found that higher quality is associated with higher salaries, some
have wondered whether the effect on earnings is through the use of college
as a screening device (Psacharopoulos 1974; McGuinness 2003a) and the
result of natural ability rather than college quality (Hause 1971, 1972; Gril-
iches and Mason 1972).
Whichever proxy has been chosen, college quality has generally been
found to be positively associated with lifetime earnings.19 In one study, the
rate of return to investment in college varied from a low of 2.5 percent to
a high of 15.6 percent depending on the measure of college quality (Ono
2004, 612).
Corruption affects the private and social return to education investment
through both of these paths. If students purchase grades, for example, stu-
dents have less incentive to learn. Advancement is less correlated with knowl-
edge and the acquisition of skill than with wealth and the ability to pay for
18
See, e.g., Mueller (1988), Kingston and Lewis (1990), Kingston and Smart (1990), Brewer et al.
(1999), and Strayer (2002).
19
See, e.g., Wales (1973), Hilmer (2002), Strayer (2002), and McGuinness (2003b).
10 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
achievement. The private and social returns to higher education are de-
graded. The signaling function of education is also reduced if there is sig-
nificant corruption among faculty and administrators. Completion of edu-
cation cannot be closely linked to the ability of students if entry into programs
and high grades are for sale. The employer does not know whether the
student completed the program and did well because she was a high-ability,
low-cost student or because she acquired grades illegally or unfairly. The
variance in ability of students completing a corrupt program is higher than
for students who do not complete a corrupt program. Even if an individual
student from a relatively corrupt institution is honest and of high ability, the
signaling value of the degree is reduced.20 An employer with a choice of
candidates reduces the risk of hiring an unproductive employee by avoiding
graduates of corrupt institutions and programs and hiring only students from
institutions, departments, or programs with a reputation for honesty. For this
employer to hire a student from a corrupt program, the student would have
to accept a significantly lower salary and prove his or her economic value to
the employer through on-the-job experience.
Corruption in undergraduate institutions affects the probability that a
student can obtain a graduate degree. Graduate schools, particularly in West-
ern universities, discount applicants from institutions in which corruption is
perceived as common. Applicants from corrupt programs are less likely to
be selected because grades and test scores do not represent their ability to
do graduate-level work.
When employers know the level of corruption within higher-education
institutions and across programs within these institutions, then we expect
employment and earnings to be positively affected by attending a university
with a low level of corruption among its faculty and staff.21 The productivity
and signaling functions are illustrated through a standard earnings functions
given in equation (1) below:
22
Equations (1) and (2) assume that the level of corruption is exogenous to the wage and is not
affected by the unobserved characteristics of workers such as their inherent honesty or ability. This is
not likely to be the case for several reasons. Those students who are willing to pay a bribe are more
likely to be selected from the lower tail of the ability distribution and have other sources of income,
possibly obtained through illegal transactions or corruption in the market. Professors who accept bribes
are also not randomly selected from the population of professors but are more likely to be drawn from
fields that are in high demand, pay a low salary relative to their value in the outside market, and are
from the lower tail of the teaching ability distribution. If a professor graduates highly productive students,
this signals her productivity to the private sector and can lead to additional income through outside
contracts, grants, and part-time employment. The professors who are of lower ability and have low value
in the outside market are more likely to demand bribes to compensate them for their lack of skill. In
this case, regression estimation of eq. (2) produces biased estimates of returns to education with and
without corruption. If the fixed-effect component of the residual is correlated with corruption percep-
tions, then the fixed-effects regression model we estimate minimizes this bias. The Transparency Inter-
national data that we use do not contain any variables that we can use to otherwise identify corruption
perceptions through instrumental variables estimation. In future surveys of the perception of education
corruption, uniform definitions would help to reduce the risk of having variations in interpretation.
12 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
rope, Latin America, Asia and Pacific, Middle East, Africa, and North Amer-
ica). We also include two variables that control for the overall corruption
environment in each country. The first variable measures whether corruption
affects political life (1 p not at all, . . . , 5 p extremely corrupt), and the
second variable measures whether corruption decreased over the last 3 years
(1 p increased a lot, . . . , 4 p decreased a lot).
We include in equation (2) interactions between secondary and higher
education and education corruption (C). The coefficients on the interactions
between corruption and education indicate whether corruption in education
affects the impact of investments in secondary and higher education on
income (c1). Equation (2) also includes interactions between corruption and
age and gender, and the coefficients on the interactions indicate whether
corruption in education affects the impact of experience and gender on
income (c2). Our sample includes 36,404 persons from 68 countries who are
under the age of 65 and have complete data on income, corruption, edu-
cation, and age; no one from the Chinese sample is included because data
on income were not collected. About 45 percent of the people in our sample
report low income or medium income, and almost 15 percent have high
income. About half of the sample has completed secondary education, with
an additional 18 percent with only basic education and 31 percent with higher
education. The average education corruption perceptions score is 3.3.
Figures 2 and 3 illustrate the variation in perceptions of corruption in
education across regions and, specifically, within Eastern and Central Europe
and Central Asia (ECA). In the highest-income countries, less than 40 percent
14 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
Fig. 3.Perceptions of corruption in education in Eastern Europe, Central Europe, and Central Asia
25
In the Middle East and the new European Union, EU accession, and former Yugoslavian coun-
tries, there was no effect of education corruption on high or low income.
26
We assume that an insignificant coefficient has a value of zero in the calculations in tables 7
and 8.
27
The marginal effect of higher education is defined relative to the next-lowest level of completed
educationsecondary education. The higher-education regression coefficient is interpreted relative to
basic primary education.
28
The CIS consists of the countries of the ECA region except the three Baltic states of Lithuania,
Latvia, and Estonia.
16 February 2008
TABLE 7
Educational Corruption, Educational Attainment, and the Probability of High Income
We next turn our attention to the effect that education corruption might
have on the economic returns to investments in education. The literature
on the internal rates of return to education in ECA is summarized in Kathryn
Anderson and Michael Cain (2006). From that review, we assume a bench-
mark internal rate of return to higher education of .2 when there is no
significant corruption in higher education. In the Kyrgyz Republic, the typical
secondary school graduate earns about $600 a year, 4 years of college edu-
cation increases earnings 20 percent, and a college graduate earns on average
$720 per year with 4 years of college education. If earned income grows at
3 percent per year, the discount rate is 3 percent, and he works for 40 years,
he accumulates about $28,800 in lifetime earned income with college edu-
cation, or $4,800 more than with secondary education.30 This calculation
assumes no change in the value of experience with corruption. If pervasive
corruption reduces the marginal return to higher education by 70 percent
from .2 to .06, the college graduate earns on average 6 percent more than
the typical secondary school graduate, or $636 a year. Over 40 years he
accumulates $25,440, or $1,440 more than those with secondary education.
Corruption reduces lifetime income accruing to the investment in higher
education by $2,360, or 50 percent of the uncorrupted higher-education
advantage.
This calculation is not based on the direct estimation of economic cost.
The result of this experiment, however, is consistent with evidence from the
Kyrgyz Republic obtained through recent interviews with firm managers,
government officials, and university faculty in five diverse oblasts.31 One high-
technology firm required employees to have a college degree and paid about
$200 a month for an entry-level position. Employees were recruited from
four universities: American University of Central Asia, Manas University
(Turkish-Kyrgyz University), Slavonic University (Russian-Kyrgyz University),
and Kyrgyz National University. Three of these universities were connected
to foreign institutions and had the lowest levels of reported corruption. Stu-
dents from regional and smaller state universities were not considered. In
addition, this firm and all other firms that recruited college-trained em-
ployees required a 3-month apprenticeship or internship period during
which managers indicated that students who had little ability would be dis-
missed. In some of these firms and at least one government ministry, written
tests were administered before anyone was employed. The test separated
students from state universities who had bought their degrees from students
who were truly educated. Finally, most of these firms reported that they use
30
A 3 percent growth in earnings per year is a common estimate of the effect of experience in
the transitioning states.
31
All the firms interviewed received management consulting through the Employment Develop-
ment Program sponsored by the U.S. Agency for International Development through Pragma Corpo-
ration and constitute a convenience sample of enterprises.
20 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
persons are much less likely to report high income in high-income countries
and Africa and are more likely to be poor in ECA, Africa, and lower-income
countries of Asia. The change in these high-income returns to higher edu-
cation ranges from 25 to 70 percent.
Many of the countries of the ECA region are participating in the Bologna
Process with members of the European Union. One objective of that process
is to make university degrees equivalent in hopes of facilitating transfer stu-
dents and greater mobility in the labor market. Universities or university
systems with reputations for corruption, whether experienced or perceived,
will likely end the Bologna Process. Were this process to actually take effect,
it would constitute the educational equivalent in the European Union of
unilateral disarmament. It is difficult to imagine why a country or a university
with a high reputation would allow its degrees to be made equivalent to those
of a university or a university system with a reputation for corruption.
A final implication of education corruption is for development assistance
agencies, many of which make investments in higher education. These agen-
cies may have to rethink their strategies when it is understood that the impact
of their investments could be significantly reduced if made in higher-edu-
cation systems with high levels of perceived corruption.
There are many mechanisms that a country or a university needs to adopt
to lessen the possibility of corruption and to lower the perception that it is
corrupt. These include codes of conduct for faculty, administrators, and stu-
dents; statements of honesty on public Web sites; university courts to hear
cases of misconduct; and annual reports to the public on changes in the
number and types of incidents. These mechanisms may well be requirements
for universities in those parts of the world hoping to have their degrees
declared equivalent to those of universities in the European Union or having
the support of international development assistance agencies.
However, the first step to effective policy intervention is to acquire in-
formation about the experience and cost of corruption. We recommend
regular surveys of students such as those reported here.34 In one country,
with surveys at two points in time, the decline in corruption was significant,
suggesting that when the possibility of exposure and professional embar-
rassment is real, the propensity to engage in corruption declines.
References
Ahlin, Christopher, and Pataki Bose. 2007. Bribery, Inefficiency and Bureaucratic
Delay. Journal of Development Economics 84 (1): 46586.
Anderson, Kathryn, and Michael Cain. 2006. The Importance of Social Investments
for Economic Growth and Governing in Transitioning States: A Survey of Recent
34
A complete list of interventions to lower the incidence of education corruption can be found
in Stephen Heyneman (2004a).
22 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION
cation, ed. Paul William Kingston and Lionel S. Lewis. Albany: State University
of New York Press.
Kingston, Paul William, and John C. Smart. 1990. The Economic Payoff of Pres-
tigious Colleges. In The High-Status Track: Studies of Elite Schools and Stratification,
ed. Paul William Kingston and Lionel S. Lewis. Albany: State University of New
York Press.
Link, Charles R. 1973. The Quantity and Quality of Education and Their Influence
on Earnings: The Case of Chemical Engineers. Review of Economics and Statistics
55 (2): 24147.
McGuinness, Seamus. 2003a. Graduate Overeducation as a Sheepskin Effect: Evi-
dence from Northern Ireland. Applied Economics 35 (5): 597608.
McGuinness, Seamus. 2003b. University Quality and Labour Market Outcomes.
Applied Economics 35 (18): 194355.
Mueller, Ralph O. 1988. The Impact of College Selectivity on Income for Men
and Women. Research in Higher Education 29 (2): 17591.
Noah, Harold J., and Max A. Eckstein. 2001. Fraud and Education: The Worm in the
Apple. Lanham, MD: Rowman & Littlefield.
Ono, Hiroshi. 2004. College Quality and Earnings in the Japanese Labor Market.
Industrial Relations 43 (3): 595617.
Posliyski, S., and V. Vatev. 2003. Survey Report: Corruption in Higher Education.
Photocopy, Anti-Corruption Student Network in Southeastern Europe, Sofia,
Bulgaria.
Psacharopoulos, George. 1974. College Quality as a Screening Device. Journal of
Human Resources 9 (4): 55658.
Rose-Ackerman, Susan. 1975. The Economics of Corruption. Journal of Public
Economics 4 (2): 187203.
Rumberger, Russell W., and Scott L. Thomas. 1993. The Economic Returns to
College, Major, Quality, and Performance: A Multilevel Analysis of Recent Grad-
uates. Economics of Education Review 12 (1): 119.
Shleifer, Andrei, and Daniel Treisman. 2005. A Normal Country: Russia after
Communism. Journal of Economic Perspectives 19 (1): 15174.
Shleifer, Andrei, and Robert W. Vishny. 1993. Corruption. Quarterly Journal of
Economics 108 (3): 599617.
Silova, Iveta, Mark Johnson, and Stephen Heyneman. 2007. Education and the
Crisis of Social Cohesion in Azerbaijan and Central Asia. Comparative Education
Review 51 (2): 15980.
Solmon, Lewis C. 1975. The Definition of College Quality and Its Impact on
Earnings. Explorations in Economic Research 2 (4): 53787.
Solmon, Lewis C., and Paul Wachtel. 1975. The Effect on Income of Type of
College Attended. Sociology of Education 48 (1): 7590.
Sosa, Luis A. 2004. Wages and Other Determinants of Corruption. Review of
Development Economics 8 (4): 597605.
Strayer, Wayne. 2002. The Returns to School Quality: College Choice and Earn-
ings. Journal of Labor Economics 20 (3): 475503.
Transparency International. 2006. Transparency International Corruption Percep-
tions Index 2006. Press release, http://www.transparency.org/policy_research/
surveys_indices/cpi/2006.
24 February 2008
COST OF CORRUPTION IN HIGHER EDUCATION